Nov. 17 (Bloomberg) -- Brazil's central bank President Henrique Meirelles said consumer credit for automobile purchases has almost returned to pre-crisis levels.

``I got the news today that in the last couple of days credit has almost returned to normal in the automobile industry,'' said Meirelles during an event at the Sao Paulo State Federation of Industries, or Fiesp.

The government had state banks Banco do Brasil SA and Banco Nossa Caixa SA make available as much as 8 billion reais ($3.44 billion) for the financial arms of carmakers to help spur lending and sales. Brazil vehicle registrations in October fell for the first time in two years as credit dried up and interest rates rose.

Local lending across all industries is improving, Meirelles said, but remains below the levels seen before the financial crisis.

Brazil's retail sales growth may have slowed in September for a second month as consumers are scaling back on spending due to higher cost of loans and concern that jobs may be cut, said analysts such as Zeina Latif, economist for ING Bank NV in Sao Paulo. The government will report the data Nov. 18.

Tax Decree

Policy makers are using state-owned banks to reactivate lending and tapping near-record foreign reserves to prop up the local currency and fund exporters. Today President Luiz Inacio Lula da Silva signed a decree allowing companies to pay some taxes as many as 20 days after the normal schedule. The measure will delay the collection of 21 billion reais of taxes, according to Finance Ministry estimates.

Meirelles said the central bank pumped the equivalent of $46 billion in the local foreign exchange market through Nov. 14, including $6.1 billion of interventions in the spot market to buy reais.

Economists covering Brazil forecast economic growth next year will slow to 3 percent, according to a weekly central bank survey, from an estimated 5 percent expansion this year.

Brazil's economy and loan growth will slow next year, Meirelles said. Still, Brazil will fare better than other nations, he said, without elaborating.

To contact the reporter on this story: Laura Price in Sao Paulo at lprice3@bloomberg.netKatia Cortes in Brasilia at at kcortes@bloomberg.net

Last Updated: November 17, 2008 13:01 EST